25th Apr 2018 06:59
LONDON (Alliance News) - Stock prices in London are set to open lower on Wednesday after equities in the US slumped on Tuesday.
This comes amid a quiet day for economic data ahead of the European Central Bank's latest monetary policy decision on Thursday. However a number of UK blue-chip companies, including Lloyds Banking and Whitbread, are scheduled to provide updates prior to the market open.
IG says futures indicate the FTSE 100 index of large-caps to open 54.30 points lower at 7,371.10 on Wednesday. The FTSE 100 index closed up 0.4%, or 26.53 points, at 7,425.40 on Tuesday.
"As a result of last night's sharp sell-off in the US markets in Europe look set to open lower this morning with attention firmly focussed on the prospect that despite improved profits, potentially higher interest rates, as well as higher costs could be prompting investors to conclude that this could be the high-water mark for returns this year," says CMC Markets chief market analyst Michael Hewson.
In the US on Tuesday, Wall Street ended firmly in the red, with the Dow Jones Industrial Average ending down 1.7%, the S&P 500 index down 1.3% and Nasdaq Composite closing 1.7%.
Caterpillar shares showed a notable downturn after the heavy-equipment maker reported better-than-expected first quarter results but executives said the quarter would be the "high watermark for the year".
Shares in Google parent Alphabet - which reported after the market close on Monday - and in Coca-Cola also fell.
Selling pressure was also generated by a continued increase in US Treasury yields, with the yield on the benchmark ten-year note climbing above 3% for the first time since early 2014.
Back in London, FTSE 100-listed drugmaker Shire said late Tuesday it is "willing to recommend" a further revised takeover offer from Japanese firm Takeda Pharmaceutical.
The offer - the fifth approach from Takeda for Shire - values Shire shares at approximately GBP49 each, and values the company as a whole at GBP46 billion.
Shares in Shire closed up 3.4% at 3,939.00 pence on Tuesday, giving it a market capitalisation of GBP35.85 billion.
The offer comprises GBP27.26 in new Takeda shares and GBP21.75 in cash. Shire shareholders would own approximately 50% of the enlarged Takeda.
"The board has indicated to Takeda that it would be willing to recommend the revised proposal to Shire shareholders subject to satisfactory resolution of the other terms of the possible offer, including completion of reciprocal due diligence by Shire on Takeda. Accordingly, the board will engage in discussions with Takeda in relation to these terms," said Shire.
Shire said it has agreed to extend the "put-up-or-shut-up" deadline until 1700 BST on May 8, the deadline having originally been due to lapse later on Wednesday.
In Tokyo on Wednesday, Takeda shares fell on the news, down 7.0% in late trade.
This comes as equities in Asia trade lower on Wednesday. The Japanese Nikkei 225 index is down 0.3%. In China, the Shanghai Composite is down 0.3%, while the Hang Seng index in Hong Kong is down 1.0%.
In Japanese data on Tuesday, the Ministry of Economy, Trade and Industry showed the all industry activity rebounded at a slower-than-expected pace in February.
The index rose 0.4% month-on-month in February, reversing a 0.1% drop in January. However, this was just below the expected increase of 0.5%.
Headlining the corporate calendar on Wednesday are full-year results from Costa-Coffee and Premier Inn owner Whitbread, with first-quarter results from Lloyds Banking Group, and first-quarter production from gold miner Frensillo and miner Antofagasta.
There are trading statements from building materials firm CRH and housebuilder Persimmon, while drugmaker GlaxoSmithKline will release its first quarter results at 1200 BST. On AIM, online clothing retailer boohoo.com reports full-year earnings.
In a slim economic calendar on Wednesday, French consumer confidence is at 0745 BST and US MBA mortgage applications and EIA crude oil stocks are due at 1200 BST and 1530 BST, respectively.
Related Shares:
Shire